Foundations of Planning

Session 06

by : Juned Ali Shah Subject: BME

• Define the nature and purpose of planning
• Classify the types of goals organizations might have and
the plans they use
• Compare and contrast approaches to goal-setting and
planning
• Discuss contemporary issues in planning
 • Planning - a primary managerial
What Is activity that involves:
• Defining the organization’s goals
Planning • Establishing an overall strategy for
achieving those goals
? • Developing plans to integrate and
coordinate work activities
Formal
Planning
• Formal planning
• Specific goals covering a
specific time period
• Written and shared with
organizational members
Why Do
Managers Plan?
• Purposes of Planning
• Provides direction
• Reduces uncertainty
• Minimizes waste
• Sets the standards for
controlling
Elements of
Planning
Goals (also Objectives)
• Desired outcomes for
individuals, groups, or entire
organizations

Plans
• Documents that outline how
goals are to be accomplished
• Describe how resources are to
be allocated and establish
activity schedules
Types of Goals
• Financial Goals - related to the expected internal
financial performance of the organization.
• (i.e., increase revenue, profits, reducing expenses)
• Strategic Goals - related to the performance of the
firm relative to factors in its external environment
• (e.g., expanding business, improving customer
satisfaction, enhancing brand awareness).
 Types of Plans

Strategic Plans Operational Plans

Establish the organization’s overall goals Specify the details of how the overall
Cover extended periods of time goals are to be achieved
(e.g., Market expansion plan, product Cover a short time period
development plan) (e.g., staffing plan, quality control plan)
Types of
Plans
• Long-Term Plans
• Time frames
extending
beyond three
years.
• Short-Term Plans
• Time frames of
one year or
less.
Traditional Goal
Setting

• Broad goals are set at the top of the

organization.
• Goals are then broken into sub-goals
for each organizational level.
• Goals lose clarity and focus as lower-
level managers attempt to interpret
and define the goals for their areas of
responsibility.
 The Downside
of Traditional Goal Setting
 Management By Objectives (MBO)

Specific performance goals Progress toward Rewards are allocated on

are jointly determined by accomplishing goals is the basis of progress
employees and managers. periodically reviewed. towards the goals.
 Does MBO Work?

Reason for MBO Success

• Top management commitment and involvement

Potential Problems with MBO Programs

• Are less effective in dynamic environments that

require constant resetting of goals
• Overemphasis on individual accomplishment may
create problems with teamwork
Steps in Goal
Setting
1. Review the organization’s mission
statement.
Do goals reflect the mission?
2. Evaluate available resources.
Are resources sufficient to accomplish
the mission?
3. Determine goals individually or with
others.
Are goals specific, measurable, and
timely?
Steps in Goal
Setting
4. Write down the goals and communicate
them.
Is everybody on the same page?
5. Review results and whether goals are
being met.
What changes are needed in mission,
resources, or goals?
Contingency Factors in Planning

Manager’s level in the organization Degree of environmental

uncertainty
Strategic plans at higher levels Stable environment: specific plans
Operational plans at lower levels Dynamic environment: specific but flexible plans
Exhibit 8-5:
Planning in the Hierarchy
Organizations
 Criticisms of Planning

PLANNING MAY CREATE PLANS CANNOT BE FORMAL PLANS CANNOT

RIGIDITY. DEVELOPED FOR DYNAMIC REPLACE INTUITION AND
ENVIRONMENTS. CREATIVITY.
Planning in Dynamic
Environments
Develop plans that are specific but flexible.

Understand that planning is an ongoing process.

Change plans when conditions warrant

alterations.
Thanks…